FX.co ★ GBP/USD tests the defining resistance

The strong fall of last week on the GBP/USD pair is, indeed, unforgettable. After such a decline, the probability of continuing the bearish momentum was very high, however, the fall did not develop this week.

The three-day growth led to the fact that today the pair is trading near the defining resistance zone of the WCZ 1/2 1.3790-1.3773. When testing this zone, the main model for searching will be bearish, since the downward movement remains a medium-term impulse.

The "false breakdown" pattern of yesterday's high will be formed just at the WCZ 1/2 test. If this happens, it is necessary to enter a short position with a stop not exceeding 50 pips. This will allow you to earn at least 150 pips on the fall of the pair. The risk/profit will not exceed the ratio of 1 to 3. The transaction will be profitable.

Working according to this model, we will get a high probability of working out. If a stop loss is received, it will indicate the formation of an upward reversal model, which will become the main one in early September.

Good luck!